Scrubbing the Sky - Episode 3 - The Carbon Gold Rush: Tech's Next Frontier

Host Ed Whittingham delves into the early days of another pioneering Direct Air Capture (DAC) company, Switzerland’s Climeworks, and its innovative modular approach to deploying its technology. Ed also looks into the developing synergy between the tech sector and carbon removal. 

Guests include: 

• Jan Wurzbacher, co-founder of Climeworks
• Lucy Hargreaves, Corporate Affairs and Climate Policy at Patch
• Jim McDermott, co-founder and the managing partner of Rusheen Capital Management, LLC
• David Keith, professor at the University of Chicago and a DAC pioneer who founded the company Carbon Engineering

Learn more at www.scrubbingthesky.com

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Produced by Amit Tandon & Bespoke Podcasts.

The podcast is part of the Carbon Herald’s podcast network.

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Transcript

Ed Whittingham: It's a scene from the early 20th century. The Icelandic city of Reykjavik is choked and smogged from coal being burnt for fuel. The scene is actually a painting, and it hangs on the wall of the presidential residence just outside of Reykjavik. In 2006, and here I'm really going to test my Icelandic pronunciation, Icelandic president Ólafur Ragnar Grímsson showed his painting to a group of scientists that included world renowned climate scientist Wally Broecker.

 Grímsson proudly tells them about his country's transition from coal to geothermal and hydroelectric resources, clearing the air of the pollution that once smothered Iceland's communities. But for Broker, Grímsson is hinting at something else. A willingness to help the world scrub the sky of excess carbon dioxide.

Because Iceland was more than just an island in the North Atlantic Ocean, the basaltic rock that Grímsson's presidential residence sat upon could be an essential element in helping the world to avoid a global climate crisis.

Welcome to Scrubbing the Sky, a podcast series about the race to scrub carbon dioxide from the atmosphere. At a planetary scale, this first season focuses on direct air capture, also known as DAC, one of the leading technology pathways to take carbon dioxide out of the atmosphere. For those companies that can successfully bring this technology to market, well, it could be a massive windfall.

And for the planet, it could help avert disaster.

ETH Zurich, also known as the Swiss Federal Institute of Technology in Zurich, is one of the most highly regarded universities in the world. It's a top choice for aspiring engineers and scientists. For Christoph Gebald and Jan Wurzbacher, it just seemed like a nice place to study. The two met on the first day of classes in 2003 and discovered a shared fondness for climbing, skiing, and entrepreneurship.

That same day, they decided they would start a company together, formalizing the commitment with a high five. Six years later, after completing Master of Engineering degrees, the pair finally landed on what their company would do, capture carbon dioxide from the air. Jan Wurzbacher talks about how it all came together.

[00:02:28] Jan Wurzbacher: There was this professor at ETH who was leading a project on, or he was actually doing a lot of research on producing solar fuels. So fuels made from sunlight and CO2 and water, and he needed CO2. And he then had already started a project to capture CO2 from the air in order to like have a closed carbon cycle to take CO2 from the air, turn it into fuel.

And when the fuel's burned, it'll go back to the air. And so, so he always emphasized this concept of a closed cycle. And yeah, that's, that's when we started. Uh, his name's, uh, Aldo Steinfeld and, uh, we, we started in his lab, but then realized that, that we would probably want to start something totally different and came up with a totally new concept.

We said, well, it might be actually better to, to use a different process, which can use low temperature, energy, a little bit of electricity. And then we came up with the concept of chemisorption based CO2 capture. Jan and 

[00:03:20] Ed Whittingham: Christoph met a family who had started up a greenhouse operation and were looking for low cost carbon dioxide to enhance the yield from their vegetables.

Conveniently, nearly next door to the greenhouses was the town's waste incineration plant, an ideal source of heat. The pair and their team set to work designing a prototype. Professor Steinfeld gave them each a 50 percent PhD position. that allowed them to continue using the university's labs and other resources and a stipend to split.

Meanwhile, the other 50 percent of their time could be devoted to their new business. They named it Climeworks in homage to their favorite boot fitter, a small shop in Chamonix named 

[00:03:59] Jan Wurzbacher: Footworks. We are both avid skiers, uh, Christophe and I, and before Founding Vineworks, we actually spent a season in Chamonix, uh, maybe, you know, very famous place in the, in the French Alps, close to Switzerland.

And like when you ski, the skis is one thing, but even more important is the boots, if you don't have good ski boots, you are not in good contact with the skis. We had our favorite boot fitter there. They were like doing really, they had good ski boots and they were really doing nice fitting. And we went there very often to tune our boots and so on.

And the name of that shop was Footworks. Sometime we sat in the university half a year later and said, well, we need something, we need something. And, uh, well, then it kind of like works out. That's really a cool name. And then, well, climate, we're doing something for climate, Climeworks. And then there were no Google hits for Climeworks.

And we really, I think within 10 minutes, we decided to purchase like the top five domains for that. And then that was decided back today, you would probably. Hire, like, a branding agency and do a half a million dollar project on that. 

[00:04:59] Ed Whittingham: The first prototype the pair built in 2010 was ungainly. An aluminum bucket containing a couple of hoses, pushing air over filters, coated with amines to absorb the carbon dioxide.

It barely worked, taking a full day to capture about half a gram of carbon dioxide. It was, however, enough to earn about 130, 000 USD in prize money from a Swiss fund established to kickstart university spin offs. During this early stage, Jan and Christoph were paid a visit by, you guessed it, David Keith, that climate scientist we've met in previous episodes.

[00:05:36] David Keith: I visited Zurich and I wanted to visit the lab of a professor who was working on a solar driven calciner that might be useful for air capture. I thought that would be fantastic and he seemed really interesting. So, I went to talk to the professor, and in fact, he's a lovely guy, but I'm not convinced his technology is that practical, and I was thinking, Ah, I'm kind of wasting my time here, but it's fun.

And then, as that kind of wrapped up, his two grad students came to me and said, Can we buy you a beer? And they wanted a bunch of advice, and told me what they were doing. They were working on this, uh, amines, on, on cellulose, solid a DAC idea, in, in that laboratory, and then they We're looking for figure out how to take a commercial.

[00:06:14] Ed Whittingham: As we heard in episode one, David had his own startup DAC company in Canada, Carbon Engineering, and Jan and Christoph were more than happy to talk shop with a potential competitor. In fact, back then, long before the current Cambrian explosion of CDR companies we find today, Carbon Engineering and Climeworks were two of the only three companies in the entire world trying to commercialize DAC technology.

So collaboration just made sense.

[00:06:39] Jan Wurzbacher: I think we always

So, so of course we don't show each other all our trade secrets and our designs. That's, that's a, we wouldn't even be allowed to do that. And that's, that's good, but we, we are always in good interaction. I have visited their sites several times and vice versa. The good thing actually about the two companies is, or like about our interaction is that we have very, very distinct, Things are very different technologies.

And so it's, there's even not so much overlap and different concepts and even different market market approaches. If we listen to climate scientists, they tell us we need to remove 10 billion tons of CO2 from the atmosphere by 2050. It's not one company is not two companies. It's likely not 10 companies who can do it.

So we need, we need several. I think that was always the spirit in which, which we interacted and, and even exchanged ideas on how could we drive politicians to support what we are doing. 

[00:07:36] Ed Whittingham: Jan and Christoph sought to ramp up their business, but a 2011 report from the American Physical Society presented a major hurdle.

It suggested that direct air capture, at an estimated cost of 600 per metric ton, was simply too expensive to justify pursuing anytime soon. And that report was read by prospective investors in Climeworks, who were being asked to invest in an unknown technology, moreover one being developed by a pair of unproven university graduates.

The American Physical Society report, in effect, was saying that the technology might not be cost competitive with other options until later in the century. Investors eventually Climeworks, but with an important condition. A prototype capable of capturing one kilogram of carbon dioxide per day. be built by the end of the year.

After a series of trials and errors, and nearing the year end investor deadline, Climeworks had built a contraption the size of a refrigerator. But size didn't matter to their investors. What mattered was whether or not they could capture CO2 from the atmosphere. And when they tested their fridge sized machine, the reading fell short of expectations.

It was showing they were capturing only about 200 grams over the course of a day. They continued tinkering, but nothing, nothing they did could improve it. Then just before Christmas, as Jan despairingly watched the unit run, he picked up on an unexpected hissing sound. Searching for the source of the sound, he discovered that one of the hoses carrying carbon dioxide was not properly fastened.

Once fixed, the sensors show that they are in fact capturing several kilograms of carbon dioxide per day. Thanks to Jan's astute hearing, they met the financing condition just in time.

As Climeworks continued to grow, Jan and Christoph moved their startup into a larger workshop and designed a semi automated manufacturing line for the 18 modules that would collect carbon dioxide for those nearby greenhouses. The assembled modules pushed air through the contactors containing a solid sorbent.

When the contactors are heated with waste heat from the nearby incineration plant, captured carbon dioxide is released and piped across the field into the large greenhouses. The extra carbon dioxide accelerates the photosynthesizing of vegetables, boosting yields by about 20%. While this sounds amazing, scientists have since found that fruits and vegetables grown at elevated carbon dioxide levels are less nutritious.

Kind of like the Wonder Bread of produce. The overall capture costs were about 600 per metric ton, and their apparatus only captured 900 metric tons of carbon dioxide per year. Equivalent to the annual emissions of roughly 200 cars. More importantly, however, Jan and Christoph had proven their design could work.

Meanwhile, on the other side of the Atlantic, David Keith was working on Carbon Engineering's large scale DAC plant design. Jan and Christoph frequently compared notes with David, and he wasn't shy about telling them why he thought a larger scale design would win out, at least with respect to economics.

[00:10:46] David Keith: The big competition to me is between liquids, probably aqueous based liquids, and solids. The carbon engineering current process in Plant 1 that's published, that is this calcium cycle back end. I mean, it has the advantage that it's cheap and it gets us to market it half a million times a year and we can build plants and there's certainly things to like about it, but fundamentally it's a dog and we all know it.

But I do think there are some structural reasons why aqueous will end up being. Uh, Sullivans for kind of large scale air capture, whichever company ends up taking them. And the reason is basically that it gets you the modularity just where you want it. And it gets you the ability to handle air with impurities and the ultra cheap contactor in the best way.

Let me say what I'm jealous about with, with Climeworks. The thing that's great is they have this box like modular structure. And then they can try and do the kind of learning curve walk down that's like what Solar and Wind have done, and why Solar and Wind are beating lots of complex, um, built technologies.

So, totally get it, and I'm insanely jealous because they can market things at a small scale. But if you want a solid contactor, the solid contactor sucks the CO2 through the air, then it gets filled with CO2, and then you have to seal it off from the air and heat it up to get that CO2 back out. And that means you've got to close off the contactor while you're heating it up.

You've got to get the heat in, and then you get CO2 out, and either you've got to make a vacuum in there to make sure you get only CO2 out, or you get a mixture of CO2 and air, and then you've got to have a separate CO2 purification step. And all of that is inherently hard to make cheap because it takes machinery.

Building a contactor like that is inherently expensive because of material costs that I just don't think go away. 

[00:12:31] Ed Whittingham: For Jan, modularity. The part that made David Keith jealous was key to the Climeworks approach. 

[00:12:37] Jan Wurzbacher: If you look at carbon engineering technology, that's really made for a large scale, so that those plans only make sense at a really large scale for Climeworks.

It's a bit, it's a bit different. We can build smaller plans, uh, without getting to completely crazy economics. It's possible, but it's not something we are pursuing for the next, for the next decade or so there. It'll, it'll be centralized, but why not? Maybe one day you'll have your own direct air capture plant with a Climeworks logo in your, your backyard.

[00:13:06] Ed Whittingham: Today Climeworks has two large scale direct air capture and storage plants in operation. Orca, their first facility, launched in 2021, and Mammoth, which, as the name would suggest, is roughly 10 times larger than Orca and opened in the spring of 2024. Both plants are located in Iceland, that island in the North Atlantic Ocean, packed with basaltic rock.

Jan explains why. 

[00:13:29] Jan Wurzbacher: We, we happen to meet with the folks of Carbfix. Carbfix is a subsidiary of Reykjavik Energy. That's the local utility company up in Iceland. And they have developed a method of storing CO2 safely. Um, on the ground in, in basalt rocks and the important, all I think the important thing is that the CO2 is mineralized in that process.

So you, you inject actually, you mix the CO2 with water, inject it into rocks. You take the water out of the, out of the ground and put it back in. So the water is just basically flowing around in a circle. Um, so you don't actually consume water, but you need water to mix the CO2. It's like kind of mineralized water that you produce, you inject it in the rocks and then the CO2 stays down there and it.

It binds on the surface of these porous rocks and turns into carbonate minerals. So you can, you can look at drill cores taken out of these reservoirs, a couple of hundred meters under the ground, and you see a lot of white stuff in these pores and these white stuff is just carbonate minerals that that's the CO2 that you've injected.

You need a lot of imagination to think of how bad CO2 could ever come out again from down there, being like a rock mineral within the pores of a huge basaltic rock formation several hundred meters down the grove, but down there, so how would that ever occur? Come out again there in the next million years.

Very, very, very likely not.

[00:14:53] Ed Whittingham: There's a growing synergy between tech and carbon removal with companies like Climeworks and carbon engineering backed by investments from the tech sector. In fact, you could say that the demand side of carbon removal is largely being fueled by tech. Companies such as Microsoft, Stripe, Meta, Shopify, and Alphabet, the parent company of Google, account for the majority of all carbon dioxide removal credits being purchased today.

In fact, Microsoft alone accounts for most of the carbon removal transactions to date. Lucy Hargraves is Global Head of Corporate Affairs and Policy at Patch, a climate technology company that helps businesses invest in carbon removal and carbon credit projects. I asked her about Silicon Valley's interest in carbon removal.

[00:15:39] Lucy Hargreaves: And the fact that it is, especially on the durable engineered side, the fact that it is so innovative really links well with the brand of many tech companies that they think we can innovate our way to save the planet. So that's like a nice brand alignment thing. From a more practical perspective, the balance sheets of big tech companies look very different than the balance sheets of natural resource companies or banks.

So They have more capital to deploy, and they have fewer emissions. Although their emissions are increasing, obviously, with AI and, uh, larger numbers of data centers related to that. It's just easier for them to deploy capital, larger amounts of capital for a relatively smaller emissions profile.

There's still, like, there's such a huge amount of tech optimism, and I think it would be a mistake. state to fall into the trap of thinking the tech sector is bad and we should therefore ignore all of the solutions coming out of the tech sector. The tech sector is doing some great things and I think that it's really just a matter of perspective, but there's an incredible ability to leverage technology, especially with like these rapid, rapid advancements in AI to do good things.

[00:17:03] Ed Whittingham: Jim McDermott is perhaps the OG tech entrepreneur turned direct air capture proponent. His journey from tech entrepreneur to original founder of 1. 5, Occidental's development subsidiary, is emblematic of that synergy. Jim's story in business started in 1996 when he was studying at UCLA and ran out of stamps one night while mailing off job applications.

This was back in the day when people actually mailed job applications. I know all the Millennials and Gen Zs listening might be confused at this point, but just stay with me.

Down the street from where he lived was a post office, but it was closed. Jim wondered why stamps couldn't be purchased online, given that this was around the time when online retailing was really starting to boom. So along with two of his business school buddies Jim decided to start a company to sell stamps online.

They registered stamps. com and it went on to become a multi billion dollar company with near monopoly on online posted sales. But of course, stamps. com isn't the reason I bring up Jim. As he told me himself, it was a visit to his first data center that turned Jim's mind towards energy use. 

[00:18:18] Jim McDermott: We went down in, I guess it would have been 1993.

No, 98 and we did an installation at the first data center in Southern California. It was a place called Exodus communications and it was this gigantic data center and we were plugging in our server. We went in there and if you've ever been in a data, I mean, now they're like, there's like a heating and cooling and whatnot.

But I was putting in our installation and I was looking at this and I, holy shit. If the, if the internet is data processing and data processing is just organized electrons, those electrons are coming from somewhere, the plume of pollution into those servers is. It's going to be on fucking imagination. My head was sort of spinning because I was like, the environmental impact of the whole world is going to be a data server.

And I, and it kind of was like a grain of sand in my mind. I was like, this isn't, this won't work. Like the, the mass energy of this won't work. Like it, there's, there's going to be too much CO2. There's going to be too much low earth pollution. There's going to be too much water use. And I'm looking at this one server, and I'm sort of extrapolating in my mind what that means if the whole world is going to be this integrated TCPIP network.

And I'm like, this is just totally never going to work. 

[00:19:33] Ed Whittingham: For a time, Jim continued his work on the new frontiers of the internet. But he had nagging doubts about where precisely he should focus his energy. 

[00:19:41] Jim McDermott: 2003 comes along, I get out of the fun, I get, I sell everything at Stance. com, I hedge it, I start this other company called Spoke, I license all the algorithms to LinkedIn.

I'm still thinking about all this stuff, right? And finally one morning I woke up and I'm like, ah, this is stupid. The internet's not fucking solving anything. Like, and Facebook is. Ad sales. Like, I don't want to be part of this. And I went back to the board and I'm like, I quit. Uh, I'm going into clean energy.

[00:20:08] Ed Whittingham: Jim founded the U. S. Renewables Group, a private equity fund focused on investing in renewable energy and clean fuel technology. As he sought out investment opportunities and reduced emissions, he realized the sole focus of all decarbonization efforts he came across was slowing down the rate of emissions growth, which is the rate at which new carbon dioxide was entering the atmosphere.

Even in a hypothetical scenario where all emissions were eliminated, Jim wondered what we should do with the roughly 120 parts per million of CO2 already added to the atmosphere since the Industrial Revolution. 

[00:20:43] Jim McDermott: I started reading, reading, reading, and then I think it was around 2006, I actually read David.

David wrote, it was like a case for climate engineering, I think it was. Jim's referring to David Keyes 2013 book, A Case for Climate Engineering. And I bought the book and it came to my house. I read it. I was like, this guy, whoever the hell he is, gets it. Like he gets it and he's writing stuff and he's not writing like kind of mumbo jumbo.

Like I have a tendency to be very biased against academics who don't have a practical bent and, and you can, Dave was like talking about, they're going to build these things. And like, I was like, 

[00:21:19] Ed Whittingham: Just as many people's entry point into direct air capture passed through Klaus Lackner, the journeys of many others, including Jim's, also pass through David Keith.

So Jim traveled to Canada to meet David in person and talk DAC. 

[00:21:33] Jim McDermott: I was like, super, super seminal thinking. You're 10 years too early. I think I kind of recommend that you go find like a rich guy. Cause like I know fun, my fun can't do this. He said we went and got Murray Edwards and like, Phil Cates to give him cash.

One of the things about having a private equity fund that's awesome, is that if you have like money to run your business, you can kind of like You're like, who's doing cool shit? And do you get on a plane and go visit them? Right? And so it was like, I went and visited the guys at Climeworks. I was cruising around the globe looking for like, who's got a real low cost answer.

And through that process, I basically concluded Aqueous solutions are basically the best that we've got for the moment. David's got it nailed. Several 

[00:22:15] Ed Whittingham: years later, Jim thought about starting another fund, but sensed that the world wasn't yet ready for his version of direct air capture as a central pillar of sustainability.

After his partner in U. S. Renewables Group retired, he started winding down the firm and took it upon himself to find his employees new jobs outside of the company. One of those employees ended up working for Bill Gates, who had recently formed Breakthrough Energy. The organization we learned about in our last episode.

Shortly after settling into the new position, Jim's former employee gave him a call. 

[00:22:47] Jim McDermott: She called and was like, Hey, there's this company up in Squamish, the halfway stop between there, you know, and Coomer and Whistler called Carbon Engineering. And they do a thing called direct air capture. And we've got money in it.

We love the tech, but we're not really sure if the market's ready and we're not super sure about management. Like, would you go look at it? And I'm like, sure. And she's like, it's, there's the guy David Keith. And I'm like, David Keith? Like, he actually did it? I went up there and then I, you know, kind of joined the board and got involved in raising money and threw a bunch of my money in.

Facts don't give a shit what you think. And there's a lot of people these days running around. Thinking that they can kind of jawbone things. Like you can berate people and say, they don't know anything about the economy or, you know, it's bad for jobs where you're like meantime, CO2 builds in the atmosphere and it has demonstrable effects that are accelerated.

And you can jawbone and you can disseminate and, you know, do whatever you're going to do, but it isn't. This isn't going to change it, which is also the reason that one of the reasons I've always loved David is that when you go through that process, you realize when there's very little margin and yelling at people who used to be in the oil and gas business and trying to vilify them. 

That 

[00:23:56] Ed Whittingham: sentiment is also shared by Climeworks JanWurzbacherr, who believes that there's a role in carbon removal that the oil sector can play. 

[00:24:04] Jan Wurzbacher: There's a whole industry on this world who practiced for the past, what, 100, 200 years, how to drill holes in the ground and get something valuable out there and do this in a proper way and with as little accidents as possible.

Now what we need to do in the next 100 years, we need to take a lot of Stuff out of the air and drill holes in the ground and put it back down there. So I think it's quite quite intuitive that there is a big overlap and knowledge and know how and I do think We should we should use that so i'm sure and i'm a true believer that the oil and gas industry will Play a vital role in carbon storage and therefore carbon removal as well.

On the other hand, in that industry, still several players are trying to use CO2 to extract more oil from the underground. And that's something what we are not doing with Climeworks. So that's not a market that we're looking at. That's just something I don't believe that. That's the way we should be going.

[00:25:05] Ed Whittingham: Coming up, new technologies like direct air capture tend to have their supporters, but they also have their detractors, like former U. S. Vice President Al Gore. 

[00:25:16] Al Gore: Direct air capture, huh? That's a really hilarious technology. And a deceptive lie to publics around the world that this is ready to go, and what it means is we can keep burning fossil fuels forever.

[00:25:32] Ed Whittingham: On the next episode of Scrubbing the Sky. We hear from more believers, but also skeptics, and consider what's next for direct air capture and carbon removal writ large.

Thanks for listening to Scrubbing the Sky. I'm Ed Whittingham. This podcast series is produced by Amit Tandon and Bespoke Podcasts with help from Pat Kelly, Lauren Bercovitch, and Chris Kelly of Kelly&Kelly. Additional support from Paul McKendrick, Eva Voinigescu, our interviewees, and our reviewers.

This series is made possible through the generous support of the Consacon Foundation, the Trottier Foundation, the Grantham Foundation, Linden Trust and Spitfire, And the Auxilium Foundation. For more information about Paul McKendrick's book that this series is based on, please visit scrubbingthesky.com.

Thanks for listening.